Versace Miami Mansion Sells at Auction for $41.5 Million

The mansion was built in 1930 by architect and philanthropist Alden Freeman. Photographer: Richard Patterson/Getty Images

Sept. 17 (Bloomberg) -- Casa Casuarina, the 10-bedroom
Miami Beach mansion where fashion designer Gianni Versace was
shot and killed, sold at an auction today for $41.5 million to a
group including the owners of Jordache Enterprises Inc.

VM South Beach LLC, whose principals include part of
Jordache’s Nakash family, beat a $41 million bid by Donald Trump
for the property, said Ryan Julison, a spokesman for Fisher
Auction Co. The deal will be taken to a bankruptcy court
tomorrow for approval.

The house, owned by Versace when he died in 1997, was sent
to auction after failing to attract bidders for its $125 million
list price, later lowered to $75 million. The home was sold as-is, including a double-king-size bed, rooftop observatory and
gold-lined pool. The minimum bid was $25 million.

The Nakash family -- whose billion-dollar Jordache empire
includes commercial real estate, nightclubs, food manufacturing
and an airline in addition to its namesake fashion business --
owns Miami properties including the Hotel Victor next door to
Casa Casuarina. The family’s immediate plan is to operate the
mansion as a hotel, though it “will not rule out any other
ideas,” Steven Nakash, a Jordache owner, said in an e-mailed
statement.

The family is also considering using the property for a
restaurant, retail or event space, or a combination of those,
said Jonathan Bennett, director of Jordache’s real estate arm.

Public Venue

“We are not closing it off, we are not using it as a
private residence,” Bennett said in a telephone interview. “It
will be open to the public and people will be able to
participate and appreciate and see this magnificent property.”

Peter Loftin, the founder and former chairman of Business
Telecom Inc., purchased the 19,000-square-foot (1,800-square-meter) house in 2000. He placed the property in bankruptcy in
July after VM South Beach tried to seize control of the sales
process, according to the Miami Herald.

Jordache bought the $25 million mortgage on the mansion
from German bank WestLB in December 2011, Bloomberg Businessweek
reported last year. It then moved to foreclose on the property.
Loftin had converted the home into a boutique hotel but failed
to make mortgage payments, the family said at the time. Loftin
sued the Nakash family and the bank, WestLB, alleging a
conspiracy whereby WestLB, wanting to offload the mortgage,
pushed Loftin into default with “fabricated” loan documents.

Auction Bidders

Joseph Nakash, who co-founded Jordache, attended today’s
auction on behalf of his family. Bidding starting at $25.5
million and increased in increments of $500,000, Lamar Fisher,
who ran the sale, said in a telephone interview. Eric Trump,
Donald’s son and executive vice president of development and
acquisitions for the Trump Organization, attended on behalf of
South Beach Ventures LLC.

The sale process lasted about 17 minutes. The property was
the most expensive real estate Fisher has ever auctioned.

The mansion at 1116 Ocean Drive, a strip frequented by
Miami Beach tourists, was built in 1930 by architect and
philanthropist Alden Freeman. Some rooms are lined with mosaic
tiles, stained glass and paintings of topless women laying by
fountains. One guest room is nicknamed the Madonna room, after
the pop singer who stayed there.

Versace purchased the house in 1992 and spent $33 million
expanding and upgrading the property, adding a south wing, pool
and garden. He was shot in front of the house in July 1997 by
Andrew Cunanan, who took his own life two weeks later. Versace’s
will left his interest in the family fashion house to his
sister, Donatella, who later sold the residence.